The Intervention of Macroeconomic Variables on Monetary Stability in Indonesia: Error–Correction Model Approach

DOI

10.2991/aebmr.k.200305.074How to use a DOI?

Keywords

ECM, cointegration, monetary stability

Abstract

This study investigates the influence of macroeconomic variable interventions on monetary stability in Indonesia. The analysis model used is cointegration of Johansen-Juselius and error correction model (ECM). Data is used by time series from 1988 to 2018. The findings in the study show that in the long run Gross Domestic Product (GDP), economic openness, and inflation significantly affect the money supply in Indonesia. In the short term, economic openness significantly influences the money supply. Overall, the intervention of the real variable interest rate raises shocks to monetary stability in the long run, although in the short run it is able to maintain its balance. The Monetary Authority in Indonesia needs to make adjustments and integration in establishing policies to realize the sustainability of monetary stability in Indonesia.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Mohammad Aliman Shahmi
AU  - Hasdi Aimon
PY  - 2020
DA  - 2020/03/10
TI  - The Intervention of Macroeconomic Variables on Monetary Stability in Indonesia: Error–Correction Model Approach
BT  - Proceedings of the 4th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2019)
PB  - Atlantis Press
SP  - 244
EP  - 248
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200305.074
DO  - 10.2991/aebmr.k.200305.074
ID  - Shahmi2020
ER  -